Russia in Review

A digest of useful news from U.S.-Russia Initiative to Prevent Nuclear Terrorism for December 24, 2010 - January 7, 2010

I. U.S. and Russia priorities for the bilateral agenda.

Nuclear security agenda:

• Ukraine has sent 110 pounds of highly enriched uranium, a significant portion of its Soviet-era stock, to Russia for disposal or storage. In May, Ukraine shipped 123 pounds of highly enriched uranium by train to Russia, and officials said they hoped that the rest of the country's stock would be exported by the end of 2012. In a statement issued by the White House on Friday, President Barack Obama said: "This action brings us all one step closer to securing all vulnerable nuclear materials." (New York Times, 12.31.10).
• The Russian Defense Ministry has denied information that the resignations of a number of highly placed military officials, including Col-Gen Vladimir Verkhovtsev, head of the 12th Main Directorate of the Defense Ministry, were due to corruption scandals."The generals have been discharged from active military service and moved into reserve due to reaching the upper age limit for military service, because of health problems or due to their own wishes, having retained the right to wear military uniform and rank badges," the Defense Ministry's information and press service directorate said in a press release. (Interfax via BBC, 12.29.10).
• The Russian Foreign Ministry's report "The Major Foreign Policy Events of 2010" listed the Nuclear Security Summit in Washington among major events of the past year, noting that at the summit "a broad consensus was reached on how to counter the threat of nuclear terrorism, and on the need to take at national and international levels drastic measures to reinforce nuclear safety, further boost the role of the IAEA in this field, and universalize the relevant international legal mechanisms." (BBC, 12.28.10).

Iran nuclear issues:

• The European Union, Russia, and China should reject Iran's invitation to visit its atomic sites this month just ahead of key talks, since that is a job for the U.N. nuclear watchdog, Western diplomats said on Wednesday. (Reuters, 01.05.10).

NATO-Russia cooperation, including transit to Afghanistan:

• No significant developments.

Counter-terrorism cooperation:

• A first-of-its-kind hijacking exercise involving the U.S., Canadian, and Russian militaries went so well that a similar drill is planned for 2011, said U.S. Air Force Lt. Col. Lee Haefner. NORAD and Russian officers will meet in Russia in February to begin planning a second exercise, Haefner said. (AP, 01.04.10).

Missile defense:

• Russian Defense Minister Anatoly Serdyukov said: "We will analyse all U.S. actions to beef up the missile defense system from the point of view of their impact on the Russian strategic nuclear forces' deterrence potential." In case of "a change in the current situation we will have to take measures we deem adequate to respond to such actions by the USA," he said. (Interfax via BBC, Itar-Tass via BBC, 12.24.10).
• Russia's military is working to deploy an "impenetrable" missile-defense shield by 2020, according to Gen. Nikolai Makarov, chief of the Russian armed forces staff. "The foundation for this system will be established as early as 2011," he said. (Washington Times, 01.05.10).
• "Now that it has passed, I remain concerned that the Treaty in its final form could still be used by Russia to limit the development, deployment, and improvement of U.S. missile defense. I will work tirelessly in the years ahead to ensure that this never happens," U.S. Senator John McCain said of the New START treaty. (Foreign Policy, 12.27.10).

Ratification of the New START treaty:

• Russia was on course Friday to ratify the New START by the end of the month after introducing non-binding amendments that countered those made by the U.S. Senate. Russia's State Duma lower house of parliament easily passed the new START agreement -- the first between the two former Cold War foes in two decades -- in an initial vote held December 24. But lawmakers have since added some 20 pages of amendments to the treaty's ratification document that are meant as a counterpoint to the changes that U.S. senators made before ratifying the treaty last month. A top Duma deputy said lawmakers would have no problem approving the pact before passing it on to the upper house -- where quick passage is certain. "I think that our third reading will happen on January 25," Konstantin Kosachev said. (AFP, 01.07.10).
• The treaty does not force Russia to reduce its number of strategic offensive weapons, but the United States will have to make such cuts, Russian Defense Minister Anatoly Serdyukov said in the State Duma. "This is a very useful treaty, especially as it significantly differs from the old one. This treaty does not restrict us in any way," Serdyukov said. "Not a single formation, not a single military unit will be cut under the treaty," he said. (Interfax, 12.24.10).
• On December 24 Russian President Dmitry Medvedev praised President Obama's efforts. "In general I would like to say that it is easy for me to work with President Obama," Medvedev said in televised remarks. "He is a man who can listen and hear, a man not imprisoned by some stereotypes, a man who, in principle, and that may be the main thing, meets this requirement: He delivers on his promise, be it the START ... or the ratification of a very important agreement on nuclear cooperation or work on international issues." (Los Angeles Times, 12.25.10).
• Fresh from winning Senate approval for a new strategic arms treaty, President Obama plans to return to the negotiating table with Russia in 2011 in hopes of securing the first legal limits ever imposed on the smaller, battlefield nuclear weapons viewed as most vulnerable to theft or diversion. (New York Times, 12.24.10).
• Former Soviet leader Mikhail Gorbachev wrote that after ratification of the New START by the U.S. Senate "the priority now is to ratify the separate treaty banning nuclear testing." Senate approval requires a two-thirds vote, or 67 of the 100 members, meaning that the test ban treaty will require the support of 14 Republicans, one more than those who supported New START. The leading Senate opponent is the No. 2 Republican, Jon Kyl of Arizona, who argues that the U.S. can't risk relinquishing its ability to test, a contention the administration and numerous independent experts reject. (New York Times, McClatchy Newspapers, 12.29.10,).
• Vladimir Dvorkin, former head of the Russian Defense Ministry's 4th Central Research Institute, said the treaty is important for Russia "because it formally preserves the nuclear balance with the United States as the last feature of a superpower." He noted, however, that "despite its positive significance, (the treaty) actually replicates the Cold War principles of nuclear deterrence, which relate to threats of the previous century but are incapable of deterring new threats, such as the proliferation of nuclear weapons and nuclear terrorism. Besides, the new treaty curbs a consolidated response to these threats." (Interfax, 12.21.10).
• Executive director of Arms Control Association Daryl G. Kimball wrote that the treaty will "further enhance U.S.-Russian cooperation on key issues, including containing Iran's nuclear program and securing vulnerable nuclear material from terrorists." (St. Petersburg Times, 12.28.10).

Energy exports from CIS:

• No significant developments.

Access to major markets for exports and imports:

• The United States suggested that an extended prison term for Russian former tycoon Mikhail Khodorkovsky was an abuse of justice, and a senior U.S. official said it may impede Russia's entry to the World Trade Organization. When Khodorkovsky and Lebedev were convicted, U.S. Secretary of State Hillary Clinton said their second trial raised serious questions about the apparent selective application of the law. A senior official of President Barack Obama's administration suggested the new sentence will make it harder for Russia to join the WTO. (Reuters, 12.30.10).
• The U.S. Department of Commerce approved a contract for Rosatom's "Tekhsnabeksport" to supply low enriched uranium (LEU) directly to FirstEnergy Nuclear Operating Company, a U.S. utility with headquarters in Ohio. (Oreanda, 12.30.10).
• With money pooled from wealthy Russians, Chinese, South African, and American investors, Russian Internet investment firm Digital Sky Technologies is teaming up with Goldman Sachs Group Inc. to invest $500 million in Facebook, giving the social-networking site a valuation of $50 billion. (Wall Street Journal, 01.04.10).

Other bilateral issues:

• Parliamentarians in Russia have castigated U.S. criticism of a police crackdown on civic protests as unwarranted interference that could undermine efforts to mend relations between the two countries. Russian police detained about 70 people, including four opposition leaders, after a pro-democracy rally in on New Year's Eve. (Financial Times, 01.04.10).
• The State Department is warning hundreds of human rights activists, foreign government officials and businesspeople identified in leaked diplomatic cables of potential threats to their safety and has moved a handful of them to safer locations, administration officials said Thursday. Among senior diplomats initially considered at risk - was the ambassador to Russia, John R. Beyrle, whose name was on cables critical of Prime Minister Vladimir V. Putin. But he appeared to have weathered the disclosures. (New York Times, 01.06.10).
• In one of the most remarkable and unexpected political demographic developments, the 700,000+ Russian-American refugees who came to the United States in the 1980s are demonstrating their ideological and pragmatic affinity with the GOP, particularly in New York City. (The New American, 01.04.10).

II. Russia news.

Domestic Political, Social, and Demographic News

• A lawyer for jailed Russian oil tycoon Mikhail Khodorkovsky on December 31 appealed his sentence of six more years in prison. Khodorkovsky's lawyer Karinna Moskalenko said Khodorkovsky's conviction on charges of stealing almost $30 billion worth of oil from his company and laundering the proceeds was marred by procedural violations. Khodorkovsky's business partner Platon Lebedev received the same sentence on December 30 and his lawyer also appealed the verdict. The ruling drew strong condemnation from the U.S. and European governments, who called it evidence of the use of Russia's judicial system for political ends. Russian Foreign Minister Sergey Lavrov on Friday dismissed the Western criticism as unfounded. "Russian courts are independent from both Russian and foreign governments," he said. (AP, 12.31.10).
• Prime Minister Vladimir Putin on Wednesday admitted that he and President Dmitry Medvedev have "different points of view" on various issues but said Medvedev and the Cabinet are "a single team" and that the Cabinet would have been unable to work "without direct support from the president." (Interfax, 12.29.10).
• In one of his first decrees in the New Year, the Russian president on Monday ordered a 20 % cut in the country's bloated bureaucracy over the next three years.
• Under the series of gradual cuts to the country's legions of bureaucrats, which have swelled by 80 % to nearly 870,000 since the start of the decade, the number of state employees will be reduced by 5 % in 2011, a further 10 % in 2012, and by the full 20% by 2013. (Russia Profile, 01.04.10).
• Russia's President Dmitry Medvedev has fired two space officials over a failed rocket launch that resulted in the loss of three satellites. The Kremlin said Wednesday that the deputy head of the Russian space agency, Viktor Remishevsky, and the deputy chief of the state-controlled RKK Energiya rocket manufacturer, Vyacheslav Filin, have lost their jobs over the Dec. 5 launch when the Proton-M booster rocket failed to put three GLONASS-M satellites into a designated orbit. The space agency chief, Anatoly Perminov, received a reprimand. (AP, 12.29.10).
• An An-22 Russian military cargo plane has crashed, killing all 12 people aboard in the Tula region, about 190 kilometers south of Moscow. (AP, 12.29.10).
• A Russian passenger jet carrying 124 people caught fire as it taxied down a snowy runway in Siberia and then exploded Saturday, killing three people and injuring 43, including six who were badly burned, officials said. (AP, 01.01.11).
• Russia's top prosecutor singled out five airlines Wednesday for apparent violations of passenger rights during a near-halt in air traffic at Moscow's two biggest airports this week. An estimated 20,000 tourists faced delays often stretching to several days during the busiest travel period ahead of the much celebrated New Year holiday. (Wall Street Journal, 12.29.10).

Economy and Energy:

• Preliminary calculations indicate that Russia's GDP grew by 3.8 % in 2010 to a total of $1,485 billion. (USRBC Russia Economic Review, December 2010).
• The international reserves of the Russian Federation on December 30 amounted to $483.1 billion. (USRBC Russia Economic Review, December 2010).
• The price of Urals crude was $91.39 a barrel on December 28, up 19 % on January 1. (USRBC Russia Economic Review, December 2010).
• The inflation rate in December rose to 8.7 %. (USRBC Russia Economic Review, December 2010).
• The RTS Index on December 30 stood at 1,773, up 23 % on January 1. (USRBC Russia Economic Review, December 2010).
• Russia's central bank tightened monetary policy for the first time since 2008 on Friday, citing growing worries that rising food prices will spur inflation. The bank raised the overnight deposit rate by 25 basis points while leaving other rates on hold. (Wall Street Journal, 12.24.10).
• Analyst Chris Weafer estimated the January holiday costs Russia up to 0.5 percent of its GDP - about $62 billion - putting the country behind as the rest of the world is two weeks into the first quarter. (AP, 01.07.10).

Defense:

• Russian Defense Minister Anatoly Serdyukov said that over the next 10 years Russia's strategic nuclear forces will be fully funded. Serdyukov said that spending on research and trial-and-design work in the interests of the strategic nuclear forces would increase from R40bn in 2011 to R280bn in 2020. (Itar-Tass via BBC, 12.24.10).
• Defense Minister Anatoly Serdyukov said: "Not only will the number of mobile missile systems featuring increased survivability and efficiency be maintained but it will be increased."Serdyukov also said that "we intend to ensure parity with the USA in terms of both deployed launchers and warheads." (Interfax via BBC, 12.24.10).
• The Russian armed forces number 1 million servicemen and about 800,000 civilian personnel, Russian Defense Minister Anatoly Serdyukov said at a State Duma meeting. (Interfax, 12.27.10).
• Russian President Dmitry Medvedev said full-fledged enrollment of students, which has interrupted due to the recent large-scale reduction of officers in the process of the army reform, will resume in the Russian military educational establishments in two years. (Interfax, 12.27.10).
• The Russian Strategic Rocket Forces plan to conduct 10 training and test launches of intercontinental ballistic missiles in 2011, press secretary of the Defense Ministry said. Russia may make some 50 space launches from three cosmodromes in 2011, a source in the aerospace industry said. (Interfax, 01.03.10).
• Russia and the U.S. have maintained parity in developing their strategic long-range aviation, Lt. Gen. Alexander Afinogentov, a deputy commander of the Russian Air Force's long-range aviation, said. "You can't say that anyone has ever been too much ahead of the other. Either the delivery vehicle or the attack weapons were more perfect at different stages. The development of strategic aviation is actually advancing neck and neck," he said. (Interfax, 12.27.10).
• French President Nicholas Sarkozy has been informed by his Russian counterpart, Dmitry Medvedev, that Russia is going to buy two French Mistral-class helicopter carriers from them. This is going to be the largest foreign arms purchase to be done by Russia since the Cold War era. The total worth of the deal is going to be $1.3 billion. Georgia, Estonia, and Lithuania are raising alarms that France may have pioneered the way for other Western countries to sell Russia whatever they have to offer, from high-technology military equipment to rights for oil pipelines. (Frenchtribune.com, New York Times, 12.28.10).
• The next launch of the Bulava submarine-launched missile will be carried out in spring 2011, Russian Navy commander-in-chief Admiral Vladimir Vysotsky told journalists. (Interfax, 12.24.10).
• Russian sailors did not shoot at sea pirates in the Gulf of Aden, Russian Navy Commander Vladimir Vysotsky said. "Our sailors don't have a habit of shooting at anyone at sea," Vysotsky said, commenting on an online video that allegedly shows Russian Pacific Fleet sailors firing at a boat with sea pirates. The Russian Military Prosecutor's Office and the Pacific Fleet division of the Federal Security Service (FSB) are investigating the origin of the aforementioned video. (Interfax, 12.24.10).

Security and law-enforcement:

• President Dmitry Medvedev on Tuesday signed a law separating the Investigative Committee from the Prosecutor General's Office and defining their responsibilities, the Kremlin said on its web site. The prosecutors will oversee the investigators, with a right to hold inquiries into their decisions to not open a case or suspend a case. Six constitutional laws had to be amended to put the bill into force. (Moscow Times, 12.29.10).
• Registration rules could get tighter and punishments for those who cut corners could get much harsher, with Prime Minister Vladimir Putin recommending jail for offenders. Medvedev echoed that the authorities must "control the movement" of the population. The PM also talked about problems with jury trials in Russia, calling them "ineffective," especially in some regions where they acquit criminals based on ethnic or clan divisions. He did, however, say that they were appropriate when the death penalty could be handed down. (Moscow Times, 12.29.10).
• Personnel of the North-West Regional Command of the Interior Troops protecting key state facilities detained 3,166 trespassers, according to a source in the command. Three of trespassers tried to penetrate "the perimeter fence." The troops prevented theft of some $500,000 worth of property in 2010. (Interfax, 12.30.10).
• The General Staff did not carry out the plan for the autumn draft campaign for the Russian Interior Ministry's Interior Troops, which ended on December 31. "In the request to the General Staff we asked for 27,000 conscripts to be drafted for our troops during the autumn conscription campaign. Unfortunately, the plan was reduced to 20,000 but even this plan has not been carried out in full. Only 18,500 joined the Internal Troops," a source in the troops said. (Interfax, 01.03.10).
• A Chechen woman who may have been involved in preparing an explosion in Moscow has been detained in Volgograd. The woman, 24, is suspected of illegal trafficking of explosives, a law-enforcement source said, adding that she would be moved to Moscow on January 6. (Interfax via BBC, 01.06.10).

Foreign affairs:

• Dmitry Medvedev has had to cancel a rare visit by a Russian president to Israel due to a strike at the Israeli foreign ministry, but working-level efforts to revive Middle East peace talks appear unaffected. Moreover, a Kremlin spokesman in Moscow said Peres and Medvedev had agreed in lieu of the Israel trip to hold talks later this month at the annual World Economic Forum in Davos. Medvedev will carry on as planned with visits this month to Jordan's King Abdullah and Palestinian President Mahmoud Abbas. (Reuters, 01.05.11).
• Tomasz Turowski, Poland's so-called ‘titular' ambassador in Moscow, has offered his resignation after allegations that he collaborated with the Kremlin while working as a secret agent in the Vatican, Cuba, and Russia. (Thenews.pl, 01.05.10).

Russia's neighbors:

• The US issued a sharp warning to Ukraine's leadership on Thursday, expressing concerns that a flurry of arrests and probes "selectively" targeting opposition politicians were "politically motivated." The statement comes as Ukrainian prosecutors ramped up interrogations of opposition leader Yulia Tymoshenko - who narrowly lost a presidential election to Viktor Yanukovych in February - and arrested more of her political allies on corruption charges. Now 10 of the officials who served under Tymoshenko, the former prime minister, have been detained during 2010. (Financial Times, 12.30.10).
• Nino Burjanadze, former speaker of the Georgian parliament and leader of the opposition party Democratic Movement - United Georgia - said Georgia "received a subtle warning at the latest NATO summit in Lisbon that it cannot hope to enter NATO as long as conflicts continue on its territory and its borders remain undetermined." (Interfax, 12.30.10).
• Kazakhstan's long-serving President Nursultan Nazarbaev has rejected the idea of extending his term in office until 2020 in a nationwide referendum. (RFE/RL, 01.07.10).
• The Hungarian ambassador to Belarus, Ferenc Kontra, has said that Belarus should release all of the protesters detained in the wake of Belarus's presidential election last month or face possible visa bans for top officials. EU diplomats on January 4 discussed reinstating the visa ban on President Aleksandr Lukashenka and other Belarusian officials. (RFE/RL, 01.05.10).
• Moldova's pro-European orientation received a boost after pro-western parties agreed to form a three-party coalition in an attempt to overcome more than a year of political deadlock. The agreement signed on Thursday enables the Alliance for European Integration to retain its hold on power, thwarting the hopes of the Communist party, which won the most votes in recent national elections. (Financial Times, 12.30.10).
• Armenia's Defense Ministry has announced that it has S-300 air defense missiles and says it made the announcement to remind neighboring Azerbaijan of the dangers of renewing military conflict. (RFE/RL, 12.29.10).
• A decision by U.S. President Barack Obama to directly appoint Matthew Bryza to the post of the ambassador to Azerbaijan, whose nomination had been stalled by lawmakers for months, has been welcomed by Baku but criticized by an Armenian-American lobbying group. So-called recess appointments are temporary, lasting only until the end of the next session of Congress. (RFE/RL, 12.30.10).